by Kathleen Brooks

The moves in financial markets can be impossible to figure out. Today, Citigroup was the hero of the stock market, jumping 35 percent, and it helped the Standard and Poor's 500-stock index shoot six percent higher.

And the reason: Citigroup said it was profitable for the first two months of the year. Businesses should be profitable — right? For Citigroup, this is the first positive piece of news about profits since 2007. It has reported losses for the past five quarters in a row and recently was being talked about as a candidate for nationalization.

 

That the market rose so steeply on the same day the Chairman of the Federal Reserve, Ben Bernanke, called for more stringent regulation of the banking industry also defies financial market logic. Usually markets react badly to being told what to do, much like your average teenager. But it's questionable if logic and markets should even exist in the same sentence.

Obviously Citigroup isn't out of the woods yet. House prices keep falling and default rates are rising, yet today the market feels bullish on Citigroup, the bank it once abandoned.